Dealing with Differences: The Iran Factor in India-U.S. Relations

Executive summary

This article examines the India-U.S. strategic partnership and argues that the Iran factor is not as big an impediment to the bilateral relationship as is often assumed.

Main argument

The India-U.S. relationship is not as sensitive to the Iran factor as is frequently depicted. Both sides are accommodative of each other's strategic interests and have so far taken the long view when dealing with their differences to avoid major disruptions in ties. India, being the regional power with global aspirations in this partnership, is additionally willing to adapt and absorb certain costs, as seen during the U.S. sanctions against Iranian oil imports in 2012, and more recently in 2018, in return for U.S. accommodation of its interests in the region, primarily the Chabahar port project that is closely tied to Afghanistan's economic security. To resolve differences, the two countries conduct bilateral negotiations in private at the highest levels of leadership and work to cultivate an understanding on how each side sells disagreements to their respective domestic audiences.

Policy implications

• • A more transactional U.S. administration should not expect India to abandon its strategic autonomy in rhetoric. However, in practice, India has proved willing to meet the U.S. halfway, as demonstrated in the case of Iran.

• • India's investment in the Chabahar port and trilateral connectivity initiative contributes to Afghanistan's economic security and should be viewed as complementing U.S. strategy in South Asia. India's presence in Iran also benefits their combined balancing strategy against China in the region.

• • The India-U.S. strategic partnership would benefit greatly from regular, direct engagement over differences. As the two countries begin bilateral consultations on the Middle East, dealing with disagreements, rather than sidestepping them, would enable each side to more clearly understand how the other thinks and operates and to leverage their complementary strengths.

The India-U.S. bilateral relationship has fundamentally transformed in the span of two decades into a strategic partnership defined by closely aligned interests. Ever since former Indian prime minister Atal Bihari Vajpayee suggested the two countries were "natural allies," a strong consensus has emerged across successive administrations in both Washington and New Delhi to build the relationship, in part as a counterweight to China's rise.¹ This commitment was best captured by former U.S. president Barack Obama, who stressed that the India-U.S. relationship would become "one of the defining partnerships" of the 21st century in his address to a joint session of the Indian parliament in 2010.² The recent adoption of a "free and open Indo-Pacific" strategy by the Trump administration was a reaffirmation of this vision. India and the United States still have no formal alliance, however, though since 2005 their interests have been codified within a "strategic partnership." As noted in the introduction to this special issue, strategic partnerships, not alliances, are a defining feature of the post–Cold War world.³ They are convenient tools that help states evade the challenges of managing an alliance and thus capture the "ambiguity of the strategic landscape" today quite well.⁴ Since 1998, India has signed over 30 strategic partnerships varying in content and relevance, with the one with the United States being the most comprehensive.

When it comes to evaluating the India-U.S. partnership, observers have focused a great deal on what brings the two states together and less so on their differences and how they manage them. Some of the most severe policy disagreements between the two emerge from well within India's immediate neighborhood and include Pakistan, Afghanistan, and Iran.⁵ This region, interestingly, falls outside the U.S. conception of the Indo-Pacific but well within India's notion of it.⁶

This article focuses specifically on Iran and the oft-cited disagreement between India and the United States over the former's engagement with the Middle Eastern state. After the Trump administration withdrew from the Iranian nuclear deal and re...